Your sales rep builds a quote in a spreadsheet using memorized labor rates, material costs from an out-of-date catalog, and a structure borrowed from the last job. It works, and the quote wins!
But then engineering picks it up and finds the BOM doesn’t match the configuration the customer specified. Production reviews the work order and discovers that the labor hours were built for a standard job, not the custom variant on the floor.
These gaps are common, and your teams know how to work around them.
However, six months later, the job closes eleven points below the quoted margin. There is a post-mortem: scope changed, materials ran over, the job took longer than expected. How did things get out of hand, again?
The problem is that your company has no system that connects what was estimated to what was actually spent. And until you do, these costly quote mistakes will keep happening.
The Price Is Locked Before the Design Is Finished
In engineer-to-order (ETO) manufacturing, the quote is the financial blueprint for the entire job. The labor hours estimated at the time of quoting become the baseline against which production efficiency is measured. The material costs become the target procurement is expected to hit. The margin in the quote is the margin the business is counting on.
What makes this different from other manufacturing models is the timing. In ETO, you commit to a price before you have fully designed the product. That sequence puts enormous pressure on the accuracy of the estimate, because by the time engineering has worked through the BOM and production has touched the job, the price is already set.
When the numbers in that quote are built on assumptions that have never been tested against historical actuals, the margin loss is locked in before the purchase order is signed. The job starts with a deficit that no amount of shop-floor efficiency can fully recover.
Three ETO Quote Mistakes That Repeat on Every Bid
Most quoting problems in ETO manufacturing trace back to one of three structural failures that are as predictable as they are expensive.
The first is misaligned product structures. The structure used to build the quote is often different from the BOM engineering works from, which is different from what production uses. These are built in separate systems, maintained by different people, and governed by different logic. When they fail to match, the estimate does not reflect what the job will actually cost. That discrepancy is the root cause of chronic under-quoting, and it persists because no one owns the connection between the three systems.
The second is tribal knowledge dependency. Your most experienced estimator has been doing this for twenty years. They know which jobs run long, which vendors pad lead times, and which customers change scope late. That knowledge is real and valuable. It is also invisible to everyone else, stored entirely in one person’s head, and gone when they are.
The third is the absence of a feedback loop. Many ETO manufacturers lack a structured process for comparing estimated costs with actual costs after a job closes. The same labor-hour assumptions are used in the next bid. The same material cost factors are applied. The same margin shortfall appears every six months.
What Each ETO Quote Mistake Costs
Misaligned product structures erode margin on every job where the quoted BOM does not match what engineering and production actually build. Labor, materials, and subcontracting all run over against a baseline that was never accurate to begin with. There is no recovering that margin mid-job.
Tribal knowledge dependency creates a growth ceiling. A company that depends on one or two estimators cannot scale that function without them. Every new hire, every acquisition creates risk. When the key person is unavailable, quoting stops or produces bids nobody trusts.
The missing feedback loop is the most damaging over time because it ensures the same mistakes repeat indefinitely. The company can grow in revenue and still be chronically under-quoting because its estimating model never improves.
What a Closed-Loop ETO Estimating System Looks Like
A closed-loop estimating system performs specific functions that most ETO companies are not currently doing.
It starts with a unified product structure. The BOM used for quoting, the BOM engineering works from, and the work order production builds to are all derived from the same source of record. When engineering makes a revision, it flows through to procurement. There is no version mismatch, no gap between what was priced and what is actually being built.
Also, it captures actuals from every completed job and makes them available at estimating time. Now you have a historical reference for the next bid with a similar scope. Over time, estimates reflect what similar jobs actually cost to complete.
And it creates a systematic comparison between estimated and actual costs after every job closes. That comparison is a learning mechanism. It tells you which job types consistently run over on labor, which material categories are underestimated, and which customer profiles tend to expand scope. This information makes the next estimate more accurate.
This capability isn’t available in the out-of-the-box version of Odoo. Novobi customization to Odoo’s Manufacturing, Sales, and PLM apps, based on experience and expertise, delivers this capability.
How Novobi ETO Blueprint Solves Misquoting Challenges
The Novobi ETO Blueprint treats estimating as a structural issue. Built on Odoo, the Blueprint delivers an ETO operating system that gives estimators, engineers, and operations teams a single system of record or source of truth. No version mismatch. No parallel documents. The quote and the BOM are linked.
The Odoo Implementation Blueprint focuses on three structural priorities during the initial implementation phase:
- Aligning the quoting product structure with the engineering BOM and production work order.
- Establishing a job cost comparison process so every closed job produces usable data for future bids.
- Building the estimating model in a way that captures institutional knowledge systematically, so expertise is not trapped in one person’s head.
The outcome is a business that delivers consistent margins, scales its estimating capacity beyond a handful of key individuals, and makes confident bids grounded in what jobs actually cost.
If your company regularly bids at target margin and delivers below it, and nobody can fully explain where the margin went, the quoting process is likely where the loss begins. That is exactly the problem this Blueprint is designed to solve.
To see what that looks like in practice, read about how Novobi helped ICS quote with confidence for the first time. To discover how the Novobi ETO Blueprint can help you deliver better quotes, book a consultation with our team.
DISCLAIMER: The information in this article reflects the views and opinions of Novobi, based on publicly available information, and is intended for informational purposes only. It is not legal or financial advice. All trademarks are the property of their respective owners.
